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Optimal Selling Mechanisms under Imperfect Commitment

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  • Juan I. Beccuti

Abstract

This paper studies the optimal mechanisms for a seller (she) who puts up for sale one individual unit per period to a single buyer (he) in a two-period game. The buyer's willingness to pay remains constant over time and is his private information. The seller can commit to the mechanism for the first period but not to the second one. In this setting, she cannot achieve greater payoffs than those obtained by posting a price in each period. However, price posting is not optimal if he is sufficiently impatient relative to her. It is also proved that a mechanism la Goethe (see Moldovanu and Tieztel 1998) is almost optimal.

Suggested Citation

  • Juan I. Beccuti, 2014. "Optimal Selling Mechanisms under Imperfect Commitment," Diskussionsschriften dp1401, Universitaet Bern, Departement Volkswirtschaft.
    • Handle: RePEc:ube:dpvwib:dp1401
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    References listed on IDEAS

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    Cited by:

    1. Juan I. Beccuti, 2014. "Optimal Selling Mechanisms under Imperfect Commitment: Extending to the Multi-Period Case," Diskussionsschriften dp1402, Universitaet Bern, Departement Volkswirtschaft.

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    More about this item

    Keywords

    asymmetric information; imperfect commitment; dynamics; mechanism design; non-optimality of posting prices;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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